LightPath Technologies(US:LPTH)2024-02-09 00:20Financial Data and Key Metrics Changes - Revenue for the fiscal second quarter was $7.3 million, down from $8.5 million in the same period last year [65] - Net loss for the second quarter was approximately $1.7 million, compared to a loss of $0.7 million in the same quarter of the prior fiscal year [69] - EBITDA for the quarter was a loss of approximately $454,000, compared to an income of $207,000 for the same quarter of the prior fiscal year [39] Business Line Data and Key Metrics Changes - Sales of infrared components were $3.6 million, representing 49% of consolidated revenue, an increase of approximately $283,000 or 9% [35][65] - Revenue from visible components decreased by approximately $1.2 million or 31%, primarily due to ongoing trends in China and the telecom industry [66] - Assembly solutions revenue decreased approximately $241,000 or 20%, primarily due to timing of shipments against a multiyear contract with a defense customer [36] Market Data and Key Metrics Changes - Total backlog at December 31, 2023, was approximately $21.2 million, a decrease of 28% compared to $29.4 million as of December 31, 2022 [43] - The company is seeing growth in infrared components and assemblies, aligning with strategic plans despite a decline in visible components [41][66] - The automotive market is expected to lead to over 1 million assemblies a year for each car company, with ASPs up to $50 per vehicle [25] Company Strategy and Development Direction - The company is transitioning from a component manufacturer to a provider of engineered solutions, focusing on imaging solutions, new markets like automotive, and defense business growth [17][30] - The acquisition of Visimid is integral to this strategy, enhancing capabilities in custom imaging solutions and increasing market share [6][18] - The company aims to capitalize on geopolitical dynamics, particularly in defense, to drive demand for its products [85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing integration of Visimid and the potential for significant revenue from the Lockheed Martin project, with expectations of tens of millions of dollars in annual revenue [22][30] - The geopolitical environment is driving demand for optics, particularly in defense applications, with increased orders from customers in Israel and Ukraine [85] - Management noted that the transition to new materials replacing Germanium is progressing well, with customers actively redesigning their systems [56][119] Other Important Information - The company has developed unique materials to replace Germanium in infrared imaging systems, which are expected to offer advantages over traditional materials [59] - Capital expenditures for the first half of fiscal 2024 were approximately $1.5 million, largely driven by the expansion of the Orlando facility [73] - The company welcomed a new independent director, Kim Crider, to the Board, enhancing its focus on defense [31] Q&A Session Summary Question: What is the total revenue capacity now with the expansion completed in Orlando? - Management indicated that the capacity could reach $50 million or more depending on the complexity of the projects [46][106] Question: Has the business in China bottomed out? - Management believes that the business in China has bottomed out, with most revenue now coming from other regions [80] Question: Is the geopolitical environment causing an uptick in demand in other parts of the business? - Yes, there has been an uptick in demand, particularly from customers in Israel and Ukraine due to recent conflicts [85] Question: How is the transition to new materials going? - The transition is going well, with significant engagement from customers to redesign their systems using new materials [119] Question: What is the outlook for the second half of the fiscal year? - Management expects an uptick in revenue in the second half, particularly in infrared components, despite ongoing challenges in visible components [124][162]